Africa’s largest diamond producing country threatens to sever ties with De Beers

Africa’s largest diamond producing country threatens to sever ties with De Beers: Botswana’s President Mokgweetsi Masisi warned Sunday that his country could sever ties with diamond giant De Beers if talks to renegotiate a sale go against his government.

Africa's largest diamond producing country threatens to sever ties with De Beers

Africa’s largest diamond producing country threatens to sever ties with De Beers

The country is Africa’s largest diamond producer, and Masisi has called on his people to support his government as it tries to strike a better deal, according to Bloomberg, which was seen by Future Leaders Academy of Africa. Botswana’s President Mokgweetsi Masisi warned Sunday that his country could sever ties with diamond giant De Beers if talks to renegotiate a sale go against his government.

A 2011 agreement governing the terms of marketing diamonds produced by Debswana – a 50-50 joint venture between the government and De Beers, which auctions most of the gems – was set to expire in 2021.

It has been extended by both parties, citing the coronavirus outbreak as the reason for delaying the conclusion of negotiations, and will run until June 30, 2023.

“If we don’t reach a win-win situation, each side will have to pack up and leave the agreement,” Masisi said at a rally of his ruling Botswana Democratic Party in his village, Mochoba, 65 km from the capital. Gaborone.

Masisi said Botswana was facing a “Goliath” in terms of negotiations.

Under the 2011 agreement, De Beers sold 90% of the diamonds and Botswana sold 10% through its subsidiary, the Okavango Diamond Company. In 2020, Botswana’s share was increased to 25%.

“Now we have had an insight into how the diamond market works and we have discovered that we were receiving less than we should,” said Masisi. “We also found out that our diamonds are profitable and that the (2011) agreement did not benefit us.”

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